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Development assistance, otherwise known as development or foreign aid, encompasses technical and financial assistance usually provided by donor countries and intergovernmental institutions such as the World Bank, International Monetary Fund and the regional development banks to developing countries either on concessionary terms or in grant form with a view to alleviating poverty and assisting the beneficiary countries in the long to medium term to achieve economic growth and sustainable development.

Notwithstanding the generous market access offered under preferential trade agreements (PTAs) such as SPARTECA, Everything But Arms Initiative and the Cotonou Agreement, most FICs have not been able to take advantage of these agreements to expand their trade. They have attributed this mainly to the lack of economies of scale, low levels of foreign direct investment, inadequate infrastructure and other supply-side constraints, as well as their geographical remoteness which adds to the cost of doing business in terms of prohibitive transportation costs and making their products uncompetitive in international markets.

It is against this background that development assistance has been designated a priority issue in the PACER Plus negotiations. There is the understanding among the Parties that the assistance that will be provided by the developed country Parties will go beyond helping the FICs to implement their obligations under the PACER Plus Agreement, but helping them to address the supply-side constraints and other challenges which have prevented them from taking advantage of market access opportunities under trade agreements. In other words, there will be an alignment of the scope of assistance to be provided under PACER Plus with that of the Aid for Trade initiative, under which there are four broad categories, namely trade policy and regulation, economic infrastructure, productive capacity building and adjustment assistance.